- Legal Industry
- No comments
A window of opportunity to significantly develop a local industry has opened in New Mexico. The financial benefits of creating, as well as keeping high-paying jobs and retaining investor capital that comes with expanding legal definitions of permissible trust options, has already been seen by many other state legislatures.
In late December, Congress passed a tax bill that created a two-year boom for the formation of particular types of trusts, those that can continue for generations to come. Investors now have to look for states that allow for “perpetual,” or “near perpetual” trusts.
Trust administration is considered a clean industry, though with a little downside to their host states. It generates work to accountants, lawyers, investment advisers, bankers, realtors, computer technicians and administrative support staff.
The only issue so far is that New Mexico laws do not yet allow for these new kinds of trusts. Approximately fifty percent of the states have already modified their laws to maintain their competitiveness in this clean industry.
Changing the trust tax laws of New Mexico would enable it to compete with other states like Alaska, New Hampshire, and Nevada. Such move could potentially generate the much-needed tax revenues with the least cost outlay. The New Mexico’s budget for oversight of the whole financial-services industry could be buttressed by the increased cash flow that resulted from expanding these businesses.
With House Bill 219, state representatives and senators are given a rare chance to make New Mexico an active participant in the trust administration field.